2,706 BSE-listed companies to gain from cut in corporate tax rate


Over 2,700 companies listed on the Bombay Stock Exchange (BSE) are likely to gain from the proposed cut in corporate tax rate to 25% proposed by Budget 2018 from the existing 30%.

A quick check based on the full financial year net sales reported by companies for the financial year 2016 – 17 (FY17) suggests that there are 2,706 listed companies on the BSE that have reported consolidated net sales less than Rs 250 crore, or Rs 2.5 billion, for the full financial year where this tax benefit has been extended, ACE Equity data show.

Some of the companies that comprise this list includes MT Educare, Unity Infraprojects, Som Distilleries, Everest Kanto Cylinder, Adlabs Entertainment, Thiru Arooran Sugars, Zydus Wellness, ICRA Limited, Zicom Electronic Security Systems, Archies Limited, Majestic Auto and Binani Industries.

The government said the lower corporation tax for medium and small enterprises (MSMEs) would leave them with higher investible surplus, which could be used to create more jobs. “The lower corporate income tax rate for 99% of the companies will leave them with higher investible surplus which in turn will create more jobs,” Jaitley said in the speech.

Analysts have given a thumbs-up to the development and expect the surplus generated to aid in job creation. A bulk of MSME’s, they feel, will stand to gain from the cut in corporate tax rate.

“The focus on rural development and the ‘common man’ was largely expected, but announcement of the new cost-plus formula for minimum support prices and the introduction of a LTCG tax on equity is a negative surprise. On the other hand, the corporate tax cut, commitment to medium-term fiscal consolidation and continued infrastructure spending are positives,” said Sonal Varma, cheif India economist at Nomura in a note.

Corporate tax rates India

Amar Ambani, partner and head of research at IIFL believes the move will be beneficial for a number of non-banking finance companies and state finance boards (SFBs) that have a focus on small enterprise finance.

“The budget addresses needs of agricultural sector and MSMEs, through which agenda of inclusive growth, formalisation of economy and boost employment generation is targeted to be realised. The FM’s promise of reducing corporate tax rate from 30% to 25% for companies remains limited to the MSMES leaving the large tax payers to wait for another year. However, 99% of MSME’s with turnover of up to Rs 2.5 billion would benefit from the rate reduction,” said a note from Deloitte India.

Company Name PL_Year End PL_Net Sales (Rs cr)
APM Industries Ltd. 201703 249.80
Hemang Resources Ltd. 201703 249.60
Paisalo Digital Ltd. 201703 249.52
Parsvnath Developers Ltd. 201703 249.42
Gufic Biosciences Ltd. 201703 249.27
MT Educare Ltd. 201703 248.22
Unity Infraprojects Ltd. 201703 247.08
Olympia Industries Ltd. 201703 246.44
Shaily Engineering Plastics Ltd. 201703 246.37
Kanpur Plastipack Ltd. 201703 245.51
AGC Networks Ltd. 201703 245.37
Som Distilleries & Breweries Ltd. 201703 244.72
Geojit Financial Services Ltd. 201703 244.35
Everest Kanto Cylinder Ltd. 201703 244.06
Faze Three Ltd. 201703 243.77
Gayatri Sugars Ltd. 201703 241.79
Riddhi Steel & Tube Ltd. 201703 239.55
Marvel Vinyls Ltd. 201703 239.47
Adlabs Entertainment Ltd. 201703 238.99
Aro Granite Industries  Ltd. 201703 238.65
Manaksia Aluminium Company Ltd. 201703 238.39
Pioneer Embroideries Ltd. 201703 238.22
PG Foils Ltd. 201703 238.05
Pix Transmissions Ltd. 201703 236.46
Associated Stone Industries  (Kotah) Ltd. 201703 235.07
Rama Steel Tubes Ltd. 201703 234.88
Surana Corporation Ltd. 201703 234.66
Ashapura Minechem Ltd. 201703 234.55
RMG Alloy Steel Ltd. 201703 234.41